Ireland is on track to have its economic resilience tested by extreme weather events, according to a new report.

The joint report from the Climate Change Advisory Council (CCAC) and the Central Bank of Ireland, published this week, has warned the current financial investment in adapting to climate change is below what is required to address escalating risks.

Both storm Darragh and storm Éowyn, which battered the country at the end of last year and beginning of the year respectively, are referenced in the report as examples of the financial impact of weather events.

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Storm Éowyn was the most expensive weather event in Irish insurance history, with final insurance claims totalling €301m.

Climate adaptation

The report focused primarily on barriers to investment in climate adaptation.

It said these include lack of local climate risk data, high upfront cost of adaptation projects, fragmented access to funding and the absence of clear investment pathways to attract private finance.

Vasileios Madouros of the Central Bank of Ireland said there is a growing need for investment in adaptation measures.

“Climate change poses risks to the financial system and the long-term stability of our economy.

“We’re already seeing the impact extreme weather has on communities, businesses and infrastructure - and we recognise the importance of addressing climate-related risks,” he stated.

Rewetting and drought-resistant crops

The difficulty in attracting the private sector to finance rewetting and afforestation is mentioned in the report.

It is outlined that while the Irish nature finance market is in its infancy, schemes such as Peatlands Finance Ireland and ReFarm aim to work towards developing structures to monetise nature-based solutions on farms.

The need for drought-resistant crops is mentioned a number of times in the report, including as an agricultural adaptation project that is required and under a section discussing private sector returns.

“Farmers adopting drought-resistant crops could pay for services or technologies through subscription models or volume pricing,” the report said.

Speaking on the report, chair of the CCAC’s adaptation committee Peter Thorne named drought-resistant crops among the measures that would be “transformative” for society.

“The development of resilient infrastructure, storm resistance in coastal defences, drought-resistant crops, nature-based solutions, early warning systems and community resilience building would be transformative for our society saving lives and protecting livelihoods,” he added.

Recommendations

Among the priority recommendations in the report is that sector-specific risk information would be available from stakeholders that include Met Éireann.

“Create a digital one-stop shop for accessible, localised and sector-specific risk information and data including incorporating solutions and decision-relevant supports for different risk types.”

The report notes the need to address the insurance protection gap - where businesses, individuals and communities lack adequate or affordable insurance.

It also proposes a national adaptation finance strategy to attract private and EU funding which should build on improved estimates of long-term investment needs.